Homebuilders rallied 3.3 percent as a group after
PulteGroup Inc.’s profit surged. McKesson Corp. jumped 4.9
percent after boosting its annual forecast and agreeing to buy
Germany’s Celesio AG for about 3.9 billion euros ($5.4 billion).
Citrix Systems Inc. climbed 4.9 percent as it raised its share
buyback. Xerox Corp. tumbled the most in four years after its
forecast trailed analysts’ estimates.

The S&P 500 gained 0.3 percent to 1,752.07 at 4 p.m. in New
York. The Dow Jones Industrial Average rose 95.88 points, or 0.6
percent, to 15,509.21. About 6.5 billion shares changed hands on
U.S. exchanges, 10 percent above the three-month average.

“We are right at the heart of earnings season so
everything at this point of time is very earnings driven,” Mark
Spellman, a portfolio manager at Value Line Funds in New York,
said by phone. His firm manages $2.3 billion. “Earnings have
been as good if not slightly better than expected. We’ve done a
lot on the cost side. What people want to see is continued
progress in the sales line.”

The S&P 500 has advanced 4.2 percent this month, closing at
a record of 1,754.67 on Oct. 22, as lawmakers agreed to raise
the U.S. borrowing limit, avoiding a possible debt default. The
benchmark gauge fell 0.5 percent yesterday, halting five days of
gains, as forecasts at companies from Caterpillar Inc. to
Broadcom Corp. disappointed investors.

Earnings Scorecard

Some 47 companies in the S&P 500 posted results today, the
busiest day of the third-quarter season. Microsoft Corp. surged
5 percent to $35.40 at 4:27 p.m. in New York after reporting
sales and profit that topped estimates. The stock slipped 0.1
percent during the regular session.

Of the 217 S&P 500 members that have released earnings so
far, 77 percent exceeded analysts’ predictions for profit, while
53 percent beat sales estimates, according to data compiled by
Bloomberg.

Earnings for members of the gauge probably increased 2.5
percent in the third quarter as sales climbed 2.2 percent,
according to analysts’ estimates compiled by Bloomberg.

‘Actual Growth’

“We want to look at the quality of these earnings as far
as looking at revenues and making sure there is actual growth
and not just manufactured growth,” David James, director of
research at Alpha, Ohio-based James Investment Research Inc.,
said in a phone interview. His firm oversees more than $4.5
billion.

Better-than-expected earnings and monetary stimulus from
the Federal Reserve have driven the S&P 500 up 23 percent this
year. The 16-day government shutdown dispute weighed on fourth-quarter growth and will prompt Fed policy makers to wait until
March before starting to scale back the $85 billion of monthly
bond purchases, a Bloomberg survey showed last week.

Data today added to signs that economic growth is slowing,
as U.S. manufacturing expanded in October at a weaker pace than
forecast, according to the Markit Economics preliminary index.
Euro-area services and factory output also missed economists’
projections while manufacturing output in China strengthened
more than anticipated.

Trade, Jobs

Government data showed the trade deficit in the U.S. was
little changed in August and more Americans than forecast filed
applications for unemployment benefits last week. A report Oct.
22 showed payrolls in the U.S. climbed by less than forecast in
September. U.S. consumer confidence dropped last week to an
eight-month low, according to the Bloomberg Consumer Comfort
Index released today.

The Chicago Board Options Exchange Volatility Index, the
gauge of S&P 500 options known as the VIX, fell 1.6 percent to
13.20 today, extending its decline for the month to 20 percent.

Six of 10 main industries in the S&P 500 advanced, with
producers of consumer discretionary products adding 1 percent to
lead gains.

The S&P Supercomposite Homebuilding Index jumped 3.3 for a
third straight gain, as all its 11 members climbed. PulteGroup,
the second-largest U.S. homebuilder by market value, surged 7
percent to $17.85 after recording a tax-related gain and rising
revenue from house sales.

Airlines Rally

Home Depot Inc., the biggest U.S. home improvement
retailer, advanced 2.3 percent to $76.78 for the steepest climb
in the Dow.

The Bloomberg U.S. Airlines Index climbed 2.7 percent to
the highest close since July 2007. Southwest Airlines Co. added
3.7 percent to $17.02 after earnings and operating revenue
matched analysts’ forecasts.

U.S. Airways Group Inc. jumped 5.9 percent to $22.67, the
highest level in almost six years, as Deutsche Bank AG lifted
the stock’s rating to buy from hold.

McKesson rose 4.9 percent to an all-time high of $150. The
largest U.S. pharmaceutical distributor said it will acquire the
50.01 percent stake in Celesio from Franz Haniel & Cie GmbH, a
family-owned investment company, for 23 euros a share.

Citrix Systems Inc., the maker of software that lets people
access work files from home, rallied 4.9 percent to $58.79 after
saying it plans to buy back as much as $500 million in shares.

Visa, AT&T

Visa Inc. gained 2 percent to a record $202.91. The world’s
biggest payments network increased its quarterly dividend by 21
percent to 40 cents a share.

Xerox fell 10 percent, the most since September 2009, to
$9.61. The printer and copier pioneer lowered its full-year
earnings forecast to as little as $1.08 a share, raising
concerns about the company’s attempt to shift into business
services.

Boston Scientific Corp. dropped 6.1 percent to $11.54. The
second-biggest maker of heart devices said it plans to eliminate
as many as 1,500 more jobs as the industry struggles with
shrinking markets and development costs. Chief Financial Officer
Jeffrey Capello will leave the role at the end of the year and
be replaced by Daniel Brennan, the company said.

Symantec Stumble

Symantec Corp. sank 13 percent to $21.49. The maker of
security software forecast sales and profit that missed analyst
estimates. Chief Executive Officer Steve Bennett said that sales
staff, who are being assigned fewer clients and getting
additional training, weren’t able to close as many deals.

Akamai Technologies Inc. slumped 11 percent to $46.06, the
lowest since August. The company, which helps customers deliver
online content faster, forecast fourth-quarter revenue and
profit that fell short of some projections.

Cameron International Corp. tumbled 14 percent, the most in
the S&P 500, to $53.85. The maker of oilfield equipment forecast
fourth-quarter revenue that trailed analysts’ estimates and
cited delays in international bookings for the tempered outlook.